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03 October 2012

Urbanization is Great! Not so Fast...

The fairy tale of economic growth is told with a section on people moving to big cities to earn a better life. That story appears to be true for countries like Indonesia and Malaysia, but has not been the case in Liberia and Madagascar. A new chart from The Economist shows that the picture is not all that clear. However, before making grand statements about urbanization and increased incomes, it is worth pointing out that only a few countries in each region are shown in the chart. It is also important to compare the urban wages verses rural wages. If cities have significantly higher wages than urban areas, than growth in urban populations at the same time of stagnating income growth is still an overall income improvement for most people in a given country.

UNICEF issued a report earlier in the year warning of the challenges faced by children living in the rapidly growing urban centers. The report says that recent estimates have 70% of the world's population living in cities by 2050. The present challenge is that 60% of people in Sub-Saharan Africa live in 'slum conditions.'

The report said that action must be taken to:

Better understand the scale and nature of poverty and exclusion affecting children in urban areas.

Identify and remove the barriers to inclusion.

Ensure that urban planning, infrastructure development, service delivery and broader efforts to reduce poverty and inequality meet the particular needs and priorities of children.

Promote partnership between all levels of government and the urban poor – especially children and young people.

Pool the resources and energies of international, national, municipal and community actors in support of efforts to ensure that marginalized and impoverished children enjoy their full rights.

The recommendations are not all that revealing but are all the more important when considering some of dubious prospects for income growth in some urban centers.